FRANKFURT (MarketWatch) -- The European Central Bank could act as early as next month to address risks to growth in the euro zone if economic data prove disappointing, Governing Council member Luc Coene said in an interview late Thursday in Washington, Bloomberg News reported. "The ECB has never ruled out things beforehand," Coene said, when asked if a rate cut was warranted. "If the data in early October shows that things are worse than we anticipated we will look at the kind of decisions we have to take for that," said Coene, who is governor of Belgium's central bank. Analysts credited the remarks with helping to lift the euro EURUSD +0.50% , which traded at $1.3539 versus the dollar in recent action, up from $1.3446 in North American trade late Thursday. http://www.marketwatch.com/story/ec...ens-coene-2011-09-23?link=MW_home_latest_news
By next month, a rate cut won't mean jack. But yes, many of us (including myself) laughed when JCT began to raise rates last spring. What a maroon.
It's wrong blaming Trichet, the culprit is the Bundesbank: they look only one way not knowing the meaning of the word "deflation", may be after Weimar they abolished it. Now that the maroon chief Jurgen Stark has just resigned, let's hope the Bundesbank shut the f*** up and let the ECB do what every other central bank is doing.
Yes the ECB is under huge pressure to do "what every other CB is doing". But ... is monetary easing "by every other CB in the world" solving any problem at all? Deflation is the natural response to previous excesses in private and public debt. The system has to clean up the rot, remove putrefact and dead tissue to emerge healthier to be able to grow sustainably. Current economic problems are not solvable with "magic" monetary printing presses.
buzzy, I agree with you, we all know the theory, the reverse minsky journey, and so on, but: I have been saying for years that the lesser evil is a lost decade trying to backstop what is possible, in japanese style but on a planetary scale. CB+fractional reserve system is not a free market, at this point the alternative of letting the system to clean up by itself through free market forces is a Great Depression 2, war and famine. Honestly I'm in favor of a lost decade.
Correctamundo! Much of this mess is from CBs "doing what the others are doing"... Including a few years back when they were all pumping the money supply at 15-20%/yr... some even 25%+
So let me get this straight, you want the Bundesbank - the only organization who actually gets it - to submit to the Global Keynesian movement worldwide?
A lost decade how about lost decades, without letting the free markets do what they ARE and WERE suppose to do is why the global market place is the in the situation its in now. There will be more than a lost decade, this will have a negative impact on world economies for 25+ years....whats being done now is not helping the situation, its way out of hand and what they are doing without letting the free market do its thing will only worsen the global economies now and for the next 25+ years! The best thing to do is to do nothing!!!!!!!!!!!
Let me answer with a question: did the Bundesbank get it back in 2004-2008 when monetary aggregates were growing at 10%/year and even the last loser on the internet was screaming "M3 is exploding, what's happening!?" ?